Press Release Details

Origin Bancorp, Inc. Reports Earnings for First Quarter 2020

RUSTON, La., April 22, 2020 (GLOBE NEWSWIRE) -- Origin Bancorp, Inc. (Nasdaq: OBNK) ("Origin" or the "Company"), the holding company for Origin Bank (the "Bank"), today announced net income of $753,000 for the quarter ended March 31, 2020. This represents a decrease of $12.1 million from the quarter ended December 31, 2019, and a decrease of $13.4 million from the quarter ended March 31, 2019. Diluted earnings per share for the quarter ended March 31, 2020, was $0.03, down $0.52 from the linked quarter and down $0.57 from the quarter ended March 31, 2019. The decline was driven by increases in provision expense of $16.2 million and $17.5 million over the linked quarter and quarter ended March 31, 2019, respectively. Provision expense was elevated due to the forecasting nature of CECL and the economic uncertainty surrounding the impact of COVID-19. Pretax pre-provision earnings for the quarter was $18.9 million, a 2.6% increase on a linked quarter and 3.3% increase on prior year quarter basis. Diluted earnings per share was $0.03 for the quarter, and the efficiency ratio declined to 65.7%, an 84 basis point decrease from the linked quarter.

"At Origin we talk about being a company that is different, that is responsive, that is nimble, that delivers for our employees, customers, communities and shareholders, and prides itself on our culture." said Drake Mills, Chairman, President and CEO of Origin Bancorp, Inc. "Over the past 60 days those claims and statements have been tested like never before, and our team has delivered. I am proud to lead an incredible organization with incredible people who, in these very tough times, have not wavered in their commitment to our company, our culture, our customers and our core values."

Financial Highlights

Net income for the quarter ended March 31, 2020, was $753,000, compared to $12.8 million for the linked quarter and $14.2 million for the quarter ended March 31, 2019.

Diluted earnings per share for the quarter ended March 31, 2020, were $0.03, compared to $0.55 for the linked quarter and $0.60 for the quarter end March 31, 2019.

Net interest income was $42.8 million for the quarter ended March 31, 2020, compared to $44.1 million for the linked quarter and $42.0 million for the quarter ended March 31, 2019. The net interest margin, fully tax equivalent, was 3.44% for the quarter ended March 31, 2020, compared to 3.58% for the linked quarter and 3.80% for the quarter ended March 31, 2019.

Provision expense was $18.5 million for the quarter ended March 31, 2020, compared to provision expense of $2.4 million for the linked quarter and $1.0 million for the quarter ended March 31, 2019.

Pre-tax pre-provision earnings were $18.9 million for the quarter ended March 31, 2020, compared to $18.4 million for the linked quarter and $18.2 million for the quarter ended March 31, 2019.

Book value per common share was $25.84 at March 31, 2020, compared to $25.52, at December 31, 2019. Tangible book value per common share was $24.51 at March 31, 2020, compared to $24.18 for the quarter ended December 31, 2019.

Total loans held for investment were $4.48 billion, an increase of $338.0 million, or 8.2%, from December 31, 2019, and an increase of $642.8 million, or 16.7%, from March 31, 2019.

Origin Bank completed its offering of $70 million in aggregate principal amount of 4.25% fixed-to-floating rate subordinated notes in February 2020, which qualifies as Tier 2 capital.

Coronavirus (COVID-19)

While the past month has been challenging, Origin continues to operate while keeping the safety and well-being of employees and customers as the Company's top priority. The Company continues to meet customers’ needs and has tried to minimize any inconvenience to its customers. All offices remain open, with all drive-thrus fully operational, while lobby access is by appointment only. Key operational initiatives implemented during the pandemic also include:

Activated the Pandemic Response Plan.

Managing IT access for employees working off-site and supporting a seamless transition to working remotely. Currently, approximately 30% of the Company's employees are working off-site.

Maintaining social distancing measures for employees working in the Company's offices and restricting lobby access.

Daily monitoring of information from federal and state governments and the Centers for Disease Control.

Coordinating medical grade sterilization of locations on an as-needed basis.

Managing absenteeism to support work flows and customer needs.

Implementing a hotline to assist employees.

Implementing a temporary pandemic Paid Time Off ("PTO") Policy.

Tracking personal travel.

Providing timely internal and external communications in response to news events and new information.

Origin is closely monitoring and reevaluating the ongoing economic effects of COVID-19 on the Company and its customers. From a financial perspective, although more current data has not yet fully emerged and it is not yet possible to predict the immediate or long-term impact of COVID-19, some of the items the Company is monitoring and actions it's taking include:

Established a SBA Paycheck Protection Program task force and approved over $480 million in loans under this program as a result of the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Proactive conversations between bankers and customers to offer constructive solutions.

Credit Quality

State and local governments have issued “stay-at-home” or “shelter-in-place” orders affecting more than 90% of Americans to curb the spread of COVID-19. The coronavirus outbreak has temporarily shuttered businesses across the Company's footprint, led to severe unemployment, and has caused a recession. Consequently, the Company's earnings for the first quarter of 2020 were significantly impacted by the COVID-19 pandemic. The deteriorating economic outlook caused the Company to build significant loan loss reserves during March 2020.

January 1, 2020, the Company adopted Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments, and recognized a one-time cumulative effect adjustment to the allowance for credit losses on loans of $1.2 million. CECL requires recording life-of-loan projected losses in the loan portfolio based on future economic events and related loan portfolio credit performance. The prior accounting standard recorded reserves based on incurred losses at the balance sheet date, generally resulting in lower reserve levels at the outset of an economic downturn. The Company recorded provision expense of $18.5 million for the quarter ended March 31, 2020, compared to provision expense of $2.4 million for the linked quarter and $1.0 million for the quarter ended March 31, 2019. The increase in provision expense from the linked quarter was primarily driven by an increase in the current estimate of expected credit losses within the loan portfolio primarily due to the impact of COVID-19 on key business sectors.

The key sectors that appear to be hardest hit by COVID-19 include health care, retail businesses, transportation, restaurants, energy and hotels. At March 31, 2020, the Company had $992.7 million, or 22.2%, of its loans held for investment invested in these sectors. Nonperforming loans held for investment in these COVID-19 impacted sectors was $23.3 million at March 31, 2020, while past due loans held for investment in the COVID-19 impacted sectors, defined as loans 30 days or more past due, as a percentage of loans held for investment in the COVID-19 impacted sectors, was 2.0% at March 31, 2020.

During the quarter ended March 31, 2020, the Company had net charge-offs of $1.1 million compared to net charge-offs of $2.8 million for the linked quarter. The Company's net charge-off ratio for the quarter ended March 31, 2020, is 0.11%, compared to 0.26% for the quarter ended December 31, 2019. Total nonperforming loans held for investment were $33.0 million at March 31, 2020, compared to $31.1 million and $30.3 million at December 31, 2019, and March 31, 2019, respectively.

Allowance for credit losses on loans as a percentage of total loans held for investment was 1.25% at March 31, 2020, compared to 0.91% and 0.93% at December 31, 2019, and March 31, 2019, respectively. The allowance for credit losses on loans as a percentage of nonperforming loans held for investment was 169.72% at March 31, 2020, compared to 120.46% and 117.59% at December 31, 2019, and March 31, 2019, respectively. The increase in the allowance for credit losses was primarily due to the expected impact of COVID-19 on the Company's loan portfolio. The Company continues to gather the latest information available to perform and update its impairment analysis. As more information becomes available, including the economic impact of the COVID-19 pandemic, the Company will update the impairment analysis, which could lead to further increases to our allowance for credit losses on loans.

Total past due loans held for investment as a percentage of loans held for investment, was 1.14% at March 31, 2020, compared to 0.72% at December 31, 2019, and 0.99% at March 31, 2019.

Results of Operations for the Three Months Ended March 31, 2020

Net Interest Income and Net Interest Margin

Net interest income for the quarter ended March 31, 2020, was $42.8 million, reflecting a decrease of $1.3 million, or 2.9%, compared to the linked quarter. A decline in yields earned on loans held for investment accounted for $1.7 million of the decrease, while a decline in average balance of loans held for investment accounted for $626,000 of the decline. These decreases were partially offset by a $1.3 million decrease in rates paid on interest-bearing deposits. Declining short term interest rates during the second half of the first quarter of 2020 have impacted the yields earned primarily on our commercial and industrial and commercial real estate loan portfolios.

Interest-bearing deposit expense decreased to $10.3 million during the current quarter, compared to $11.1 million for the quarter ended December 31, 2019. The $806,000 decrease in interest-bearing deposit expense was primarily driven by falling interest rates and was partially offset by an increase in the average balance of savings and interest-bearing deposit accounts. Average savings and interest-bearing deposit transaction accounts increased by $196.1 million, or 8.7% and $424.5 million, or 21.0%, compared to the linked quarter and quarter ended March 31, 2019, respectively. Average subordinated debentures increased by $41.6 million, compared to the linked quarter and by $41.7 million, compared to March 31, 2019, largely driven by the $70 million subordinated notes offering completed by the Bank in February 2020. The notes qualify as Tier 2 capital.

The fully tax-equivalent net interest margin ("NIM") was 3.44% for the first quarter of 2020, a 14 basis point decrease from the fourth quarter of 2019 and a 36 basis point decrease from the first quarter of 2019. The yield earned on interest-earning assets decreased 19 basis points and 49 basis points compared to the linked quarter and the quarter ended March 31, 2019, respectively. The rate paid on total interest-bearing liabilities for the quarter ended March 31, 2020, was 1.37%, representing a decrease of nine basis points and 18 basis points compared to the linked quarter and the quarter ended March 31, 2019, respectively. The Company continues to experience margin compression on a linked quarter basis primarily caused by decreasing loan yields driven by consistently declining short-term interest rates experienced over the last several quarters. Interest rates may decline further and further decrease the Company’s loan yields, which may continue to put pressure on NIM due to our asset sensitive balance sheet.

Noninterest Income

Noninterest income for the quarter ended March 31, 2020, was $12.1 million, an increase of $1.3 million, or 12.3%, from the linked quarter. The increase from the linked quarter was primarily driven by an increase of $1.3 million in insurance commission and fee income, a $525,000 in swap fee income, and an increase of $369,000 in other income, offset by a $590,000 decrease in mortgage banking income.

The increase in insurance commission and fee income was caused by the seasonality of policy renewals. Swap fee income during the first quarter was driven by the increased volume of new transactions compared to the linked quarter. The increase in other income was primarily driven by a $316,000 payout on a bank-owned life insurance policy.

The decrease in mortgage banking revenue compared to the linked quarter was primarily driven by a decrease in the mortgage servicing fair value valuation due to declining interest rates as well as uncertainty in the economy at quarter end and its related impact on the estimated future cash flows within our mortgage servicing portfolio.

Noninterest Expense

Noninterest expense for the quarter ended March 31, 2020, was primarily flat when compared to the linked quarter. Noninterest expense for the quarter ended March 31, 2020 was $36.1 million, a decrease of $437,000, or 1.2%, compared to the linked quarter. The decrease from the linked quarter was largely driven by decreases of $280,000 and $258,000 in advertising and marketing expenses, and loan related expense, respectively, partially offset by increases of $293,000 and $202,000 in professional fees and data processing, respectively.

Financial Condition

Loans

Total loans held for investment at March 31, 2020, were $4.48 billion, an increase of $338.0 million, or 8.2%, compared to $4.14 billion at December 31, 2019, and an increase of $642.8 million, or 16.7%, compared to $3.84 billion at March 31, 2019. The increase in loans held for investment when compared to December 31, 2019, was primarily reflected in Mortgage Warehouse Lines of Credit and Commercial and Industrial loans, which increased $162.6 million and $112.0 million, respectively. The increase in Mortgage Warehouse Lines of Credit is primarily due to increased refinance activity due the current low interest rate environment. The increase in Commercial and Industrial loans is primarily due to elevated draws on commercial lines of credit near the end of the quarter.

For the quarter ended March 31, 2020, average loans held for investment were $4.12 billion, a decrease of $49.8 million, or 1.2%, from $4.17 billion for the linked quarter.

Deposits

Total deposits at March 31, 2020, were $4.56 billion, an increase of $327.6 million, or 7.7%, compared to $4.23 billion at December 31, 2019, and an increase of $658.0 million, or 16.9%, compared to $3.90 billion, at March 31, 2019. Brokered deposits contributed an increase of $282.6 million when compared to the linked quarter, and an increase of $107.4 million when compared to March 31, 2019. Noninterest-bearing deposits had an increase of $38.1 million, or 3.5%, compared to the linked quarter and an increase of $137.9 million, or 14.1%, compared to the quarter ended March 31, 2019.

Average total deposits for the quarter ended March 31, 2020, increased by $121.9 million, or 2.9%, over the linked quarter primarily due to an increase of $104.3 million in average public fund deposits.

For the quarter ended March 31, 2020, average noninterest-bearing deposits as a percentage of total average deposits was 25.4%, compared to 27.4% for the quarter ended December 31, 2019, and 25.3% for the quarter ended March 31, 2019.

Borrowings

Origin Bank announced the completion of an offering of $70 million in aggregate principal amount of 4.25% fixed-to-floating rate subordinated notes due 2030 (the “Notes”) in February 2020. The Notes will initially bear interest at a fixed annual rate of 4.25% then adjust to the three-month LIBOR rate plus 282 basis points. The Notes are intended to qualify as Tier 2 capital for regulatory capital purposes for Origin Bank.

Average FHLB advances and other borrowings for the quarter ended March 31, 2020, decreased by $44.0 million, or 12.9%, compared to the quarter ended December 31, 2019 and decreased by $38.2 million, or 11.4% over the quarter ended March 31, 2019. The Company entered into a new $300.0 million short-term FHLB advance with a fixed interest rate of 0.295%, late in March 2020, that due to the timing of the advance, did not have a significant impact on the average FHLB advances and other borrowings. The advance will mature in June 2020. The additional borrowings were used to bolster balance sheet liquidity due to projected draws on commercial lines of credit and to fund the Paycheck Protection Program ("PPP") loans associated with the CARES Act. The Company has approved $480.8 million, or 1,727 in PPP loans throughout the Company's markets until the program funds were exhausted in mid-April 2020.

Stockholders' Equity

Stockholders' equity was $606.6 million at March 31, 2020, an increase of $7.4 million, or 1.2%, compared to $599.3 million at December 31, 2019, and an increase of $38.5 million, or 6.8%, compared to $568.1 million at March 31, 2019.

Conference Call

Origin will hold a conference call to discuss its first quarter 2020 results on Thursday, April 23, 2020, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To participate in the live conference call, please dial (844) 695-5516; International: (412) 902-6750 and request to be joined into the Origin Bancorp, Inc. (OBNK) call. A simultaneous audio-only webcast may be accessed via Origin's website at www.origin.bank under the Investor Relations, News & Events, Events & Presentations link or directly by visiting https://services.choruscall.com/links/obnk200423.html.

If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Origin's website at www.origin.bank, under Investor Relations, News & Events, Events & Presentations.

About Origin Bancorp, Inc.

Origin is a financial holding company for Origin Bank, headquartered in Ruston, Louisiana, which provides a broad range of financial services to small and medium-sized businesses, municipalities, high net-worth individuals and retail clients from 43 banking centers, located from Dallas/Fort Worth, Texas across North Louisiana to Central Mississippi, as well as in Houston, Texas. For more information, visit www.origin.bank.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information regarding Origin's future financial performance, business and growth strategy, projected plans and objectives, including any expected purchases of its outstanding common stock, and related transactions and other projections based on macroeconomic and industry trends, including expectations regarding interest rate cuts by the Federal Reserve and the impact of those cuts on Origin's results of operations, and expectations regarding the Company's liquidity, including in connection with advances obtained from the FHLB, which are all subject to change and may be inherently unreliable due to the multiple factors that impact broader economic and industry trends, and any such changes may be material. Such forward-looking statements are based on various facts and derived utilizing important assumptions and current expectations, estimates and projections about Origin and its subsidiaries, any of which may change over time and some of which may be beyond Origin's control. Statements preceded by, followed by or that otherwise include the words "anticipates," "believes," "estimates," "expects," “foresees,” "intends," "plans," "projects," and similar expressions or future or conditional verbs such as "could," "may," “might,” "should," "will," and "would" or variations of such terms are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Further, certain factors that could affect Origin's future results and cause actual results to differ materially from those indicated in the forward-looking statements include: the duration and impacts of the COVID-19 global pandemic and efforts to contain its transmission, including the effect of these factors on Origin’s business, customers and economic conditions generally; deterioration of Origin's asset quality; factors that can adversely impact the performance of Origin’s loan portfolio, including real estate values and liquidity in Origin's primary market areas; the financial health of Origin's commercial borrowers and the success of construction projects that Origin finances; changes in the value of collateral securing Origin's loans; Origin’s ability to anticipate interest rate changes and manage interest rate risk; the effectiveness of Origin’s risk management framework and quantitative models; Origin’s inability to receive dividends from Origin Bank and to service debt, pay dividends to Origin’s common stockholders, repurchase Origin’s shares of common stock and satisfy obligations as they become due; business and economic conditions generally and in the financial services industry, nationally and within Origin's primary market areas; changes in Origin’s operation or expansion strategy or Origin's ability to prudently manage its growth and execute its strategy; changes in management personnel; Origin's ability to maintain important customer relationships, reputation or otherwise avoid liquidity risks; increasing costs as Origin grows deposits; operational risks associated with Origin’s business; volatility and direction of market interest rates; increased competition in the financial services industry, particularly from regional and national institutions; difficult market conditions and unfavorable economic trends in the United States generally, and particularly in the market areas in which Origin operates and in which its loans are concentrated; an increase in unemployment levels and slowdowns in economic growth; Origin's level of nonperforming assets and the costs associated with resolving any problem loans including litigation and other costs; the credit risk associated with the substantial amount of commercial real estate, construction and land development, and commercial loans in Origin's loan portfolio; changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, as well as tax, trade, monetary and fiscal matters; periodic changes to the extensive body of accounting rules and best practices; further government intervention in the U.S. financial system; compliance with governmental and regulatory requirements, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and others relating to banking, consumer protection, securities and tax matters; Origin's ability to comply with applicable capital and liquidity requirements, including its ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets; changes in the utility of Origin's non-GAAP liquidity measurements and its underlying assumptions or estimates; uncertainty regarding the future of the London Interbank Offered Rate and the impact of any replacement alternatives on Origin’s business; natural disasters and adverse weather events, acts of terrorism, an outbreak of hostilities, widespread illness or public health outbreaks or other international or domestic calamities, and other matters beyond Origin’s control; and system failures, cybersecurity threats and/or security breaches and the cost of defending against them. For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Origin's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") and any updates to those sections set forth in Origin's subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Origin's underlying assumptions prove to be incorrect, actual results may differ materially from what Origin anticipates. Accordingly, you should not place undue reliance on any forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Origin does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for Origin to predict those events or how they may affect Origin. In addition, Origin cannot assess the impact of each factor on Origin's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the recent outbreak of the COVID-19 pandemic and the impact of varying governmental responses that affect our customers and the economies where they operate. All forward-looking statements, expressed or implied, included in this communication are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Origin or persons acting on Origin's behalf may issue. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

____________________________(1) Pre-tax, pre-provision earnings is a non-GAAP financial measure. For a reconciliation of this non-GAAP financial measure to its comparable GAAP measure, please see page 13.(2) Calculated by dividing noninterest expense by the sum of net interest income plus noninterest income.(3) March 31, 2020, ratios are estimated and calculated at the Company level, which is subject to the capital adequacy requirements of the Federal Reserve Board.

Origin Bancorp, Inc.Consolidated Balance Sheets

(Dollars in thousands)

March 31, 2020

December 31, 2019

September 30, 2019

June 30, 2019

March 31, 2019

Assets

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Cash and due from banks

$

91,104

$

62,160

$

79,005

$

75,204

$

66,312

Interest-bearing deposits in banks

469,075

229,358

229,757

124,356

44,928

Total cash and cash equivalents

560,179

291,518

308,762

199,560

111,240

Securities:

Available for sale

601,637

501,070

492,461

548,980

563,826

Held to maturity, net of allowance for credit losses

28,383

28,620

28,759

28,897

19,033

Securities carried at fair value through income

12,242

11,513

11,745

11,615

11,510

Total securities

642,262

541,203

532,965

589,492

594,369

Non-marketable equity securities held in other financial institutions

52,267

39,808

49,205

49,008

42,314

Loans held for sale

75,322

64,837

67,122

58,408

42,265

Loans

4,481,185

4,143,195

4,188,497

3,984,597

3,838,343

Less: allowance for credit losses

56,063

37,520

37,126

36,683

35,578

Loans, net of allowance for credit losses

4,425,122

4,105,675

4,151,371

3,947,914

3,802,765

Premises and equipment, net

80,193

80,457

80,921

80,672

78,684

Mortgage servicing rights

16,122

20,697

19,866

21,529

23,407

Cash surrender value of bank-owned life insurance

36,874

37,961

37,755

33,070

32,888

Goodwill and other intangible assets, net

31,241

31,540

31,842

32,144

32,497

Accrued interest receivable and other assets

130,056

110,930

117,119

107,828

111,772

Total assets

$

6,049,638

$

5,324,626

$

5,396,928

$

5,119,625

$

4,872,201

Liabilities and Stockholders' Equity

Noninterest-bearing deposits

$

1,115,811

$

1,077,706

$

1,154,660

$

1,003,499

$

977,919

Interest-bearing deposits

2,673,881

2,360,096

2,309,387

2,011,719

2,101,706

Time deposits

766,554

790,810

820,270

839,794

818,623

Total deposits

4,556,246

4,228,612

4,284,317

3,855,012

3,898,248

FHLB advances and other borrowings

716,909

417,190

419,681

601,346

335,053

Subordinated debentures

78,539

9,671

9,664

9,657

9,651

Accrued expenses and other liabilities

91,313

69,891

94,903

69,317

61,127

Total liabilities

5,443,007

4,725,364

4,808,565

4,535,332

4,304,079

Stockholders' equity

Common stock

117,380

117,405

117,409

118,871

118,730

Additional paid-in capital

235,709

235,623

235,018

243,002

242,579

Retained earnings

237,720

239,901

229,246

216,801

205,289

Accumulated other comprehensive income

15,822

6,333

6,690

5,619

1,524

Total stockholders' equity

606,631

599,262

588,363

584,293

568,122

Total liabilities and stockholders' equity

$

6,049,638

$

5,324,626

$

5,396,928

$

5,119,625

$

4,872,201

Origin Bancorp, Inc.Consolidated Quarterly Statements of Income

Three months ended

March 31, 2020

December 31, 2019

September 30, 2019

June 30, 2019

March 31, 2019

Interest and dividend income

(Dollars in thousands, except per share amounts, unaudited)

Interest and fees on loans

$

50,049

$

52,331

$

53,932

$

51,461

$

49,175

Investment securities-taxable

2,712

2,640

2,786

3,208

3,341

Investment securities-nontaxable

758

772

826

871

858

Interest and dividend income on assets held in other financial institutions

1,497

976

1,262

1,523

1,120

Total interest and dividend income

55,016

56,719

58,806

57,063

54,494

Interest expense

Interest-bearing deposits

10,250

11,056

11,623

11,540

10,497

FHLB advances and other borrowings

1,351

1,428

2,420

2,415

1,834

Junior subordinated debentures

605

140

141

139

137

Total interest expense

12,206

12,624

14,184

14,094

12,468

Net interest income

42,810

44,095

44,622

42,969

42,026

Provision for credit losses

18,531

2,377

4,201

1,985

1,005

Net interest income after provision for credit losses

24,279

41,718

40,421

40,984

41,021

Noninterest income

Service charges and fees

3,320

3,488

3,620

3,435

3,316

Mortgage banking revenue

2,769

3,359

3,092

3,252

2,606

Insurance commission and fee income

3,687

2,428

3,203

3,036

3,510

Gain on sales of securities, net

54

—

20

—

—

(Loss) gain on sales and disposals of other assets, net

(25

)

(38

)

(132

)

(166

)

3

Limited partnership investment (loss) income

(429

)

(267

)

279

(418

)

400

Swap fee income

676

151

1,351

172

511

Change in fair value of equity investments

—

—

—

367

—

Other fee income

466

440

414

360

276

Other income

1,626

1,257

1,033

1,138

982

Total noninterest income

12,144

10,818

12,880

11,176

11,604

Noninterest expense

Salaries and employee benefits

21,988

22,074

21,523

22,764

22,613

Occupancy and equipment, net

4,221

4,241

4,274

4,200

4,044

Data processing

2,003

1,801

1,763

1,810

1,587

Electronic banking

900

936

924

892

689

Communications

477

454

411

647

586

Advertising and marketing

711

991

930

1,089

798

Professional services

1,171

878

956

839

904

Regulatory assessments

615

679

(387

)

691

711

Loan related expenses

1,142

1,400

1,315

790

669

Office and operations

1,441

1,632

1,712

1,849

1,481

Intangible asset amortization

299

302

302

353

364

Franchise tax expense

496

496

683

492

489

Other expenses

633

650

658

679

446

Total noninterest expense

36,097

36,534

35,064

37,095

35,381

Income before income tax expense

326

16,002

18,237

15,065

17,244

Income tax (benefit) expense

(427

)

3,175

3,620

2,782

3,089

Net income

$

753

$

12,827

$

14,617

$

12,283

$

14,155

Basic earnings per common share

$

0.03

$

0.55

$

0.62

$

0.52

$

0.60

Diluted earnings per common share

0.03

0.55

0.62

0.52

0.60

Origin Bancorp, Inc.Loan Data

At and for the three months ended

Loans held for investment

March 31,2020

December 31, 2019

September 30, 2019

June 30, 2019

March 31, 2019

Loans secured by real estate:

(Dollars in thousands, unaudited)

Commercial real estate

$

1,302,520

$

1,296,847

$

1,305,006

$

1,219,470

$

1,202,269

Construction/land/land development

563,820

517,688

509,905

524,999

488,167

Residential real estate

703,263

689,555

680,803

651,988

638,064

Total real estate

2,569,603

2,504,090

2,495,714

2,396,457

2,328,500

Commercial and industrial

1,455,497

1,343,475

1,367,595

1,341,652

1,287,300

Mortgage warehouse lines of credit

437,257

274,659

304,917

224,939

202,744

Consumer

18,828

20,971

20,271

21,549

19,799

Total loans held for investment

4,481,185

4,143,195

4,188,497

3,984,597

3,838,343

Less: allowance for credit losses

56,063

37,520

37,126

36,683

35,578

Loans held for investment, net

$

4,425,122

$

4,105,675

$

4,151,371

$

3,947,914

$

3,802,765

Nonperforming assets

Nonperforming loans held for investment

Commercial real estate

$

11,306

$

6,994

$

7,460

$

9,423

$

8,622

Construction/land/land development

3,850

4,337

860

1,111

922

Residential real estate

4,076

5,132

5,254

4,978

5,196

Commercial and industrial

13,619

14,520

17,745

14,810

15,309

Consumer

181

163

153

156

206

Total nonperforming loans held for investment

33,032

31,146

31,472

30,478

30,255

Nonperforming loans held for sale

840

927

1,462

2,049

1,390

Total nonperforming loans

33,872

32,073

32,934

32,527

31,645

Repossessed assets

5,296

4,753

4,565

3,554

3,659

Total nonperforming assets

$

39,168

$

36,826

$

37,499

$

36,081

$

35,304

Classified assets

$

79,980

$

69,870

$

73,516

$

80,124

$

77,619

Past due loans held for investment (1)

51,018

29,980

29,965

31,884

37,841

Allowance for credit losses

Balance at beginning of period

$

37,520

$

37,126

$

36,683

$

35,578

$

34,203

Impact of adopting ASC 326

1,247

—

—

—

—

Provision for loan credit losses

18,397

3,167

3,435

1,782

823

Loans charged off

1,425

3,268

5,415

840

608

Loan recoveries

324

495

2,423

163

1,160

Net charge-offs (recoveries)

1,101

2,773

2,992

677

(552

)

Balance at end of period

$

56,063

$

37,520

$

37,126

$

36,683

$

35,578

Credit quality ratios

Total nonperforming assets to total assets

0.65

%

0.69

%

0.69

%

0.70

%

0.72

%

Total nonperforming loans to total loans

0.74

0.76

0.77

0.80

0.82

Nonperforming loans held for investment to loans held for investment

0.74

0.75

0.75

0.76

0.79

Past due loans held for investment to loans held for investment

1.14

0.72

0.72

0.80

0.99

Allowance for credit losses to nonperforming loans held for investment

169.72

120.46

117.97

120.36

117.59

Allowance for credit losses to total loans held for investment

1.25

0.91

0.89

0.92

0.93

Net charge-offs (recoveries) to total average loans held for investment (annualized)

0.11

0.26

0.29

0.07

(0.06

)

____________________________(1) Past due loans held for investment are defined as loans 30 days past due or more

Origin Bancorp, Inc.Average Balances and Yields/Rates

Three months ended

March 31, 2020

December 31, 2019

March 31, 2019

AverageBalance

Yield/Rate

AverageBalance

Yield/Rate

AverageBalance

Yield/Rate

Assets

(Dollars in thousands, unaudited)

Commercial real estate

$

1,274,633

4.88

%

$

1,307,023

5.03

%

$

1,214,682

5.17

%

Construction/land/land development

545,076

5.21

526,494

5.20

457,175

5.74

Residential real estate

695,040

4.76

694,436

4.95

634,287

4.81

Commercial and industrial

1,372,801

4.74

1,356,316

4.88

1,287,461

5.35

Mortgage warehouse lines of credit

210,480

4.46

262,392

4.47

147,453

5.63

Consumer

19,687

6.74

20,889

6.68

20,482

6.83

Loans held for investment

4,117,717

4.85

4,167,550

4.95

3,761,540

5.28

Loans held for sale

33,288

4.86

42,873

2.63

17,687

4.05

Loans Receivable

4,151,005

4.85

4,210,423

4.93

3,779,227

5.28

Investment securities-taxable

450,576

2.41

437,626

2.41

498,733

2.68

Investment securities-nontaxable

102,954

2.95

100,705

3.07

101,794

3.37

Non-marketable equity securities held in other financial institutions

40,494

3.09

48,669

2.88

42,161

2.90

Interest-bearing balances due from banks

319,953

1.49

139,508

1.77

123,326

2.69

Total interest-earning assets

5,064,982

4.37

%

4,936,931

4.56

%

4,545,241

4.86

%

Noninterest-earning assets(1)

335,722

335,048

325,807

Total assets

$

5,400,704

$

5,271,979

$

4,871,048

Liabilities and Stockholders' Equity

Liabilities

Interest-bearing liabilities

Savings and interest-bearing transaction accounts

$

2,444,953

1.05

%

$

2,248,863

1.21

%

$

2,020,440

1.26

%

Time deposits

781,907

1.98

803,344

2.08

848,629

2.03

Total interest-bearing deposits

3,226,860

1.28

3,052,207

1.44

2,869,069

1.48

FHLB advances and other borrowings

297,750

1.80

342,000

1.62

335,910

2.05

Securities sold under agreements to repurchase

16,866

0.45

18,198

0.65

39,757

1.39

Subordinated debentures

51,308

4.72

9,668

5.67

9,647

5.28

Total interest-bearing liabilities

3,592,784

1.37

%

3,422,073

1.46

%

3,254,383

1.55

%

Noninterest-bearing deposits

1,097,646

1,150,381

972,617

Other liabilities(1)

99,112

101,600

83,957

Total liabilities

4,789,542

4,674,054

4,310,957

Stockholders' Equity

611,162

597,925

560,091

Total liabilities and stockholders' equity

$

5,400,704

$

5,271,979

$

4,871,048

Net interest spread

3.00

%

3.10

%

3.31

%

Net interest margin

3.40

%

3.54

%

3.75

%

Net interest income margin - (tax- equivalent)(2)

3.44

%

3.58

%

3.80

%

____________________________(1) Includes Government National Mortgage Association ("GNMA") repurchase average balances of $27.9 million, $24.5 million, and $30.1 million for the three months ended March 31, 2020, December 31, 2019, and March 31, 2019, respectively. The GNMA repurchase asset and liability are recorded as equal offsetting amounts in the consolidated balance sheets, with the asset included in Loans held for sale and the liability included in FHLB advances and other borrowings.(2) In order to present pre-tax income and resulting yields on tax-exempt investments comparable to those on taxable investments, a tax-equivalent adjustment has been computed. This adjustment also includes income tax credits received on Qualified School Construction Bonds.